Motion for Sanctions Case No. CV 07-3850 SI 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 RICHARD A. JONES (Bar No. 135248) E-mail: [email protected]COVINGTON & BURLING LLP 1 Front Street San Francisco, CA 94111 Telephone: (415) 591-6000 Facsimile: (415) 591-6091 THOMAS S. WILLIAMSON, JR. (Pro hac vice) E-mail: [email protected]SHIMICA D. GASKINS (Pro hac vice) E-mail: [email protected]COVINGTON & BURLING LLP 1201 Pennsylvania Ave., N.W. Washington, DC 20004 Telephone: (202) 662-6000 Facsimile: (202) 662-6291 Attorneys for Defendant GILEAD SCIENCES, INC. UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF CALIFORNIA SAN FRANCISCO DIVISION DAVID MOORE, Plaintiff, v. GILEAD SCIENCES, INC., Defendant. Case No. CV 07-3850 SI DEFENDANT'S NOTICE OF MOTION AND MOTION FOR SANCTIONS; MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT Judge: Honorable Susan Y. Illston Date: September 9, 2011 Time: 9:00 a.m. Case3:07-cv-03850-SI Document78 Filed08/01/11 Page1 of 29
Transcript
Motion for Sanctions Case No. CV 07-3850 SI
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RICHARD A. JONES (Bar No. 135248) E-mail: [email protected] COVINGTON & BURLING LLP 1 Front Street San Francisco, CA 94111 Telephone: (415) 591-6000 Facsimile: (415) 591-6091 THOMAS S. WILLIAMSON, JR. (Pro hac vice) E-mail: [email protected] SHIMICA D. GASKINS (Pro hac vice) E-mail: [email protected] COVINGTON & BURLING LLP 1201 Pennsylvania Ave., N.W. Washington, DC 20004 Telephone: (202) 662-6000 Facsimile: (202) 662-6291 Attorneys for Defendant GILEAD SCIENCES, INC.
UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF CALIFORNIA SAN FRANCISCO DIVISION
DAVID MOORE,
Plaintiff,
v.
GILEAD SCIENCES, INC.,
Defendant.
Case No. CV 07-3850 SI DEFENDANT'S NOTICE OF MOTION AND MOTION FOR SANCTIONS; MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT Judge: Honorable Susan Y. Illston Date: September 9, 2011 Time: 9:00 a.m.
Case3:07-cv-03850-SI Document78 Filed08/01/11 Page1 of 29
Motion for Sanctions Case No. CV 07-3850 SI
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TABLE OF CONTENTS Page(s)
NOTICE OF MOTION AND STATEMENT OF RELIEF SOUGHT .......................................... 1
MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF DEFENDANT’S MOTION FOR SANCTIONS BASED ON PLAINTIFF’S SPOLIATION OF EVIDENCE.......................................................................................... 2
INTRODUCTION AND STATEMENT OF ISSUES TO BE DECIDED .................................... 2
A. Moore Wiped His Gilead Computer at Least Six Times in 2006 Despite Contemplating Litigation and Taking Steps to File a Qui Tam Complaint Against Gilead ........................................................................................................ 6
B. Moore Performed a Complete Wipe of His Gilead Computer in 2008 .................. 7
C. Forensic Analysis Documented Specific Instances of Moore’s Destruction of Evidence ............................................................................................................. 8
D. Moore Provided Materially Incomplete Interrogatory Responses Regarding His Wiped Hard Drives and Attempted to Give False Testimony at His Deposition .................................................................................. 9
I. Moore Repeatedly Engaged in Willful Destruction of Evidence ..................................... 10
A. Moore destroyed relevant documents even though he had a duty to preserve those documents ..................................................................................... 11
B. Moore destroyed evidence with a culpable state of mind..................................... 14
II. Dismissal Is the Appropriate Sanction for Moore’s Egregious Spoliation....................... 17
A. Moore willfully destroyed relevant evidence resulting in prejudice to Gilead.................................................................................................................... 18
B. There Is No Less Drastic Sanction Available Here .............................................. 21
III. Monetary Sanctions Are Warranted Because Moore Has Wrongfully Destroyed Evidence ........................................................................................................................... 24
Holmes v. Petrovich Development Co., 191 Cal. App. 4th 1047 (2011)..................................... 14
In re Napster, Inc. Copyright Litig., 462 F. Supp. 2d 1060, 1068, 1078 (N.D. Cal. 2006) .......................................................................................................................... 11, 24
Leon v. IDX Sys. Corp., 464 F.3d 951, 956, 958-961 (9th Cir. 2006)...................... 10, 15, 16, 17,
18, 19, 20, 22, 24
Micron Tech., Inc. v. Rambus Inc., 2011 U.S. App. LEXIS 9730 (Fed. Cir. May 13, 2011) .......................................................................................................................... 11, 12
Miller v. Time-Warner Communs., Inc., 1999 U.S. Dist. LEXIS 14512 (S.D.N.Y. 1999) .......................................................................................................................... 17, 23
Nat’l Ass’n of Radiation Survivors v. Turnage, 115 F.R.D. 543, 556-557 (N.D. Cal. 1987) ................................................................................................................................ 11
Nursing Home Pension Fund v. Oracle Corp., 254 F.R.D. 559, 563, 565 (N.D. Cal. 2008) .......................................................................................................................... 18, 21
Pension Comm. of the Univ. of Montreal Pension Plan v. Banc of Am. Secs, LLC, 2010 U.S. Dist. LEXIS 4546 (S.D.N.Y. 2010)................................................................ 18
Realnetworks, Inc. v. DVD Copy Control Ass’n, 264 F.R.D. 517, 523 (N.D. Cal 2009)............ 22
United States use of Wiltec Guam, Inc. v. Kahaluu Constr. Co., 857 F.2d 600, 604 (9th Cir. 1988) ................................................................................................................. 20
United States v. Kitsap Physicians Serv., 314 F.3d 995, 1001 (9th Cir. 2002) ........................... 10
West v. Goodyear Tire & Rubber Co., 167 F.3d 776, 779 (2d Cir. 1999)................................... 17
New York Labor Law § 740.......................................................................................................... 5
New York State Finance Law § 191.............................................................................................. 5
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NOTICE OF MOTION AND STATEMENT OF RELIEF SOUGHT
PLEASE TAKE NOTICE that on September 9, 2011 at 9:00 a.m. in Courtroom 10, 19th
Floor of the above-entitled Court, located at 450 Golden Gate Avenue, San Francisco,
California, Defendant Gilead Sciences, Inc. (“Gilead” or “Defendant”) will move this Court for
an Order dismissing the Complaint of David Moore (“Plaintiff” or “Moore”) pursuant to the
Court’s inherent power as a sanction for spoliation of evidence.
This motion is based upon this Notice of Motion and Motion, the accompanying
Memorandum of Points and Authorities, the accompanying supporting declarations, all
pleadings and papers on file in this litigation, and upon such other matters as may be presented
to the Court at or before the time of the hearing.
Defendant respectfully requests that this Court enter an Order dismissing Plaintiff’s
Complaint with prejudice.
By: /S/ Richard A. Jones RICHARD A. JONES (BAR NO. 135248) COVINGTON & BURLING LLP 1 FRONT STREET SAN FRANCISCO, CA 94111 (415) 591-6000 [email protected] THOMAS S. WILLIAMSON, JR. (PRO HAC
VICE) SHIMICA D. GASKINS (PRO HAC VICE) COVINGTON & BURLING LLP 1201 PENNSYLVANIA AVE., N.W. WASHINGTON, DC 20004 (202) 662-6000 [email protected][email protected] Attorneys for Defendant Gilead Sciences, Inc.
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MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF DEFENDANT’S MOTION FOR SANCTIONS BASED
ON PLAINTIFF’S SPOLIATION OF EVIDENCE
Pursuant to the Court’s inherent power, Defendant Gilead Sciences, Inc. (“Defendant”)
hereby moves the Court for the entry of an Order dismissing this action with prejudice as a
sanction upon David Moore (“Plaintiff”) for the spoliation of evidence. His demonstrably
egregious conduct undoubtedly constitutes spoliation and is precisely the exceptional conduct
for which dismissal is appropriate.
INTRODUCTION AND STATEMENT OF ISSUES TO BE DECIDED
Defendant asks this Court to decide whether: (1) Plaintiff engaged in spoliation by
deliberately and intentionally destroying thousands of potentially relevant documents and
completely wiping his computer hard drive; and (2) the appropriate sanction for such spoliation
is dismissal of the Complaint, with prejudice.
Plaintiff, David Moore (“Moore” or “Plaintiff”), previously worked as a therapeutic
specialist at Gilead Sciences, Inc. (“Gilead”) between 2003 and 2008. In November of 2006,
Moore filed a qui tam Complaint against Gilead alleging violations of the False Claims Act, as
codified at 31 U.S.C. § 3730. Despite knowing that he intended to pursue a qui tam action
against Gilead as early as the spring of 2006, Moore repeatedly – and intentionally – destroyed
relevant documents, correspondence, electronic mail, and other evidence critical to the defense
of this case; he did so by wiping data from the hard drive of his company-issued laptop
computer. Moore continued his spoliation activities over a two-year period (2006-2008) and
thereby caused the destruction of more than 10,000 potentially relevant electronic files.
Moore’s deposition testimony and Gilead’s forensic examination of his work-laptop hard
drives show the following:
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1. Moore wiped his work computer “frequently” in 2006, as often as once a month, after retaining counsel and deciding to pursue litigation against Gilead.
2. Moore wiped his hard drive at least six times between September and November 2006; notably, the last of those wipings occurred just one week before Moore filed his qui tam action against Gilead on November 15, 2006.
3. In August 2008, well after he was engaged in litigation against Gilead and well after he had received a December 2006 legal hold memorandum instructing him not to destroy any documents specifically relating to a subpoena issued by the Department of Justice in furtherance of his own qui tam complaint, Moore completely wiped his hard drive—destroying innumerable documents likely relevant to this litigation.
4. Moore has admitted that his wiping was “a deliberate, intentional act” meant to ensure that Gilead did not have access to information on his work computer because he was expecting that Gilead would be his “enemy” in litigation.
In addition, both in his interrogatory responses and his deposition testimony, Plaintiff Moore has
attempted to compromise the integrity of the discovery process in order to conceal the extent of
his spoliation activities.
Moore’s frequent and intentional destruction of evidence constitutes egregious
misconduct that has seriously prejudiced Gilead’s ability to defend this case adequately.
Accordingly, this Court should dismiss Moore’s claims.
FACTUAL BACKGROUND
Moore was employed by Gilead from March 3, 2003 until October 31, 2008 as a
therapeutic specialist (sales representative) of HIV drugs covering the sales territory
encompassing South Brooklyn in New York City. See Pl.’s Third Am. Compl. ¶ 8. In the
spring of 2006, Moore began contemplating qui tam litigation against Gilead and consulting
with counsel. See Ex. B, Dep. of David Moore, Vol. II at 49.1 During that time, he
intentionally engaged in activities on behalf of Gilead that he claims were illegal, at least in part, 1 All referenced exhibits are attached to the accompanying Declaration of Shimica Gaskins. All exhibits are hereafter cited as Ex. A-Ex. H.
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with the intent of creating evidence in furtherance of his qui tam case and to try to qualify for a
multimillion dollar financial reward. See id. at 49-50. Also during that time, he secretly taped
his co-workers on sixteen occasions to further his qui tam ambitions. See Ex. A, Dep. of David
Moore, Vol. I at 111. He later continued those activities in 2006 and 2007 in cooperation with
the FBI. See id.
On November 15, 2006, Moore filed a qui tam complaint under seal against Gilead. See
Pl.’s Third Am. Compl. ¶ 14. The gravamen of his Complaint was that Gilead “pressured” its
sales staff to arrange speaker programs to facilitate payments to physicians who were potential
prescribers of Gilead’s products in order to increase the physicians’ volume of prescriptions.
See id; see also Ex. A at 74, 165. Because the qui tam case was filed under seal in 2006, Gilead
was unaware of Moore’s identity until mid-August 2008.
In March 2008, after receiving a less-than-satisfactory annual performance review in the
prior month, Moore requested to take a medical leave of absence from Gilead. He now claims
that he suffered from anxiety and other ailments because he was allegedly “pressured” to engage
in “illegal” marketing activities. See Ex. A at 74, 159, 162, and 165. He began his medical
leave on March 26, 2008. He was originally scheduled to return to work on May 15, 2008. See
id. at 162, 251. However, Moore requested several extensions of his leave, which Gilead
granted, see, e.g., id. at 258-61, although Gilead also informed Moore on repeated occasions that
he would lose his right to reinstatement if he stayed on medical leave beyond June 18, 2008, see
id. at 315-18.
Following the third leave extension and after more than four months of leave had
elapsed, Gilead informed Moore on August 4, 2008 that, due to business necessity, Gilead was
in the process of filling Moore’s position. See id. at 281. Moore acknowledges that Gilead was
unaware that he had been acting as a qui tam relator at the time the company sent this letter. See
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Ex. B at 99-100; Ex. A at 300-01. One week later (August 11, 2008), Moore responded stating
that he could return to his therapeutic sales position immediately with no medical restrictions.
See id. Even though he had an unsatisfactory job performance record, Moore was allowed to
apply to fill his former position. See id. at 340-43. Gilead interviewed Moore for his former
position as well as several other candidates, but he was not selected. See id. at 344; Ex. B at 11.
Gilead eventually terminated Moore at the end of October 2008. See Ex. B at 12.
The Department of Justice (“DOJ”) investigated Moore’s claims. See Ex. B at 67.
However, in March 2009, DOJ declined to intervene in Moore’s qui tam suit. See id. at 68-69.
Subsequently, Moore voluntarily dismissed his underlying qui tam allegations against Gilead.
See id. At 70; see also Pl.’s Mot. to Dismiss [Dkt. No. 41].
On October 29, 2010, Moore filed a Third Amended Complaint alleging, inter alia, that
Gilead had terminated his employment in violation of the anti-retaliation provisions of the False
Claims Act, as codified at 31 U.S.C. § 3730(h); the New York Whistleblower Law, as codified
at New York Labor Law § 740; the New York False Claims Act, as codified at New York State
Finance Law § 191; and public policy. See generally Pl.’s Third Am. Compl. Specifically,
Moore alleges that when Gilead declined to rehire him as a therapeutic specialist for the
Brooklyn sales territory, the company acted in retaliation for his filing a qui tam action. See id.
¶ 1. Moreover, he continues to assert that the alleged “pressure” by Gilead to conduct speaker
programs was the cause of his medical condition as well as the basis for his underlying qui tam
claim. See id. ¶ 13; see also Ex. A at 74, 165.
Moore has now admitted to erasing numerous files – deliberately and repeatedly – from
the computer that Gilead provided him as an employee. See Ex. B at 111-15. As discussed in
greater detail below, his unlawful actions – both while contemplating litigation and subsequent
to his filing suit – destroyed the files and made them unrecoverable.
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A. Moore Wiped His Gilead Computer at Least Six Times in 2006 Despite Contemplating Litigation and Taking Steps to File a Qui Tam Complaint Against Gilead
While employed at Gilead, Moore received two hard drives for his work laptop – a
Seagate External USB Hard Disk Drive (the “Seagate hard drive”) and a Toshiba 60GB Hard
Disk Drive (the “Toshiba hard drive” and, collectively, “the hard drives”). See Ex. C, Forensic
Report, at 3; id., CR1 at 3. He used his company laptop and the hard drives installed in them to
carry out his daily work as a therapeutic specialist for Gilead. See Ex. B at 104-05. In the
spring of 2006, Moore began contemplating litigation against Gilead and contacted counsel for
assistance. See id. at 48-49. By September of 2006, Moore had “retained [his] attorneys and
[he] was already communicating with [his] attorneys regarding . . . filing the qui tam.” See id. at
135. Around this same time, Moore, on his own initiative, installed software called “Secure
Clean 4” on his Gilead laptop, which he used to wipe the computer’s hard drive “frequently.”
See id. at 134, 152.
SecureClean 4 is manufactured by White Canyon Software. “White Canyon Software
specializes in the manufacture and selling of applications designed to permanently destroy
electronically stored information (ESI).” Ex. C, CR1 at 2; see also Ex. B at 132-33. The Secure
Clean software provides several options, including a “quick clean” and “deep clean” option.
See Ex. C, CR1 at 2, 3.2
Moore performed both “quick clean” and “deep clean” wipes on his computer in 2006.
See Ex. B at 146-49. He estimated that he did this as often as once a month. See id. at 157.
Specifically, he performed four “quick clean” wipes in 2006 – three on October 15 and one on
2 A “quick clean” deletes internet files, deleted files, e-mails, and temporary files within a couple of minutes. A “deep clean” is more time consuming and intensive. The “deep clean” option overwrites and permanently deletes files from a hard drive. See id.
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October 29. See Ex. C, CR1 at 18. He also performed two “deep clean” wipes in 2006 – one on
September 11 and one on November 8. See id. He admits that the quick cleans and deep cleans
permanently erased any files from the hard drive that he had specifically designated for deletion,
including temporary internet files, files in the “Recycle” bin, and deleted files. See Ex. B at
115, 133, 143. Further, Moore acknowledges that there is no way to verify exactly the types or
content of the documents that were wiped. See id. at 165.
In his deposition, Moore explained that he “wiped the computer regularly from the time
[he] installed [the program].” See id. at 168. “That is essentially when [his] communications
with the government began and that is when . . . [he] wanted to keep all those communications
separate – [He] wanted to prevent Gilead from learning of those communications because then
they would know about the qui tam.” See id.
Moore filed his qui tam complaint on November 15, 2006. See Pl.’s Third Am. Compl.
¶ 14. Just one week before filing his qui tam complaint, on November 8, Moore performed
a “deep clean” wipe. See Ex. C, CR1 at 3. Moore also received a legal hold memorandum in
December 2006 instructing him not to destroy any documents relating to a DOJ subpoena that
had been issued for Moore’s qui tam complaint. See Ex. D, Legal Hold Memo; Ex. B at 84-86.
B. Moore Performed a Complete Wipe of His Gilead Computer in 2008 After He Had Commenced Litigation Against Gilead
In 2008, Moore intentionally and completely wiped his hard drive, almost two years after
he had sued Gilead, destroying numerous documents potentially relevant to this litigation. The
software used was called “Wipe Drive” by White Canyon. See Ex. B at 113. Moore found this
software by doing an internet search. See id. at 113. He purchased the software in 2008 and ran
the software “many times to make sure everything was wiped.” See id. at 111, 114.
Moore chose to delete everything when the White Canyon application advised him that
the wiped information and documents would be permanently irretrievable. See id. at 115. He
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deleted sales data, personal documents, action plans, e-mail communications regarding his
search for employment outside Gilead, and e-mails regarding assistance to the government’s
investigation. See id. at 115, 121. He admitted that these were deliberate and intentional acts on
his part because he felt the documents on his computer were a matter of personal privacy, and
he did not want Gilead, described by him as his “enemy,” to go through his personal e-mails.
See id. at 115, 119. In addition, he claimed that he had been communicating with his lawyers
via his work computer for a two- or three-year period at that time, and he did not want Gilead to
have access to information that he regarded as “privileged.” See id. at 119.
C. Forensic Analysis Documented Specific Instances of Moore’s Destruction of Evidence
Gilead retained Guidance Software, Inc. to perform a forensic analysis of the Seagate
and Toshiba hard drives that Moore possessed while employed by Gilead. Guidance Software’s
Senior Director of Risk Management, Andreas T. Spruill, conducted the forensic analysis and
provided examination reports of each hard drive. See Ex. C at 2.
Mr. Spruill’s analysis of the Seagate hard drive revealed that on September 11, 2006,
Moore installed SecureClean 4 onto his work laptop. See id., CR1 at 2. Following the
installation, Moore initiated the application’s “deep clean” function. See id. “This action
permanently destroyed all deleted e-mail, temporary internet files, and temporary Windows
files, as well as the contents of the devices [sic] unallocated space, file slack and MFT entries of
deleted items.” See id. On October 15, 2006 and October 29, 2006, Moore initiated the “quick
clean” function. See id. at 3. This action permanently destroyed all deleted e-mail, temporary
internet files and temporary Windows files.” See id. And, on November 8, 2006, Moore
initiated a “deep clean.” See id. The use of these applications resulted in the erasure of
“10,040 . . . deleted items.” See id. at 14. (Emphasis added.)
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The forensic analysis of the Toshiba hard drive commissioned by Gilead confirmed that
“no content could be recovered” from the wiping in 2008 and that the hard drive’s “data storage
areas was completely overwritten [in 2008] with a repetitive pattern consisting of the ‘FF’
hexadecimal value.” See Ex. C at 2. The report concluded that an “unknown drive wiping
utility [was used] to overwrite the data storage area.” See id. at 4.
D. Moore Provided Materially Incomplete Interrogatory Responses Regarding His Wiped Hard Drives and Attempted to Give False Testimony at His Deposition
Moore admitted to the 2008 wiping of the Toshiba hard drive in his Response and
Objections to Gilead’s First Set of Interrogatories dated February 3, 2011, which inquired about
wiping activities by Moore between January 2006 and the present. See Ex. E, Pl.’s Interrog.
Resp., No. 20. Moore stated that, “[he] carried out the erasing of the laptop used for Gilead in
approximately August or September 2008.” See id. However, he failed to include in this
answer any information regarding the wiping that occurred with the Seagate hard drive in 2006.
During his deposition, Moore again admitted to deploying the wiping program in August
2008. See Ex. B at 108-09. He stated that his Interrogatory answer was “to the best of [his]
recollection” accurate and truthful. See id. at 130. When confronted with the possibility that his
Interrogatory answer was inaccurate, Moore flatly denied that the answer was not fully accurate.
See id.3 In response to more pointed questioning about his activities in 2006, Moore’s
recollection was abruptly stirred; and only then did he provide testimony that he “frequently”
3 Moore asserted his denial at deposition even though Gilead’s outside counsel had informed Moore’s attorney several months earlier that “we have reason to believe that your client [Moore] is not being forthcoming about how often he has engaged in spoliation of evidence since January 1, 2006.” Ex. F, Letter to Rob Hennig from Thomas S. Williamson, Jr. (Feb. 9, 2011). (Gilead does not believe, and does not intend to suggest, that Moore’s counsel was aware that Moore had provided a materially incomplete interrogatory response prior to Moore’s deposition testimony.)
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used the wiping software to destroy data over a period of several months in 2006. See Ex. B at
152-53.
LEGAL ARGUMENT
The first section of the legal argument describes the manner in which Moore’s
misconduct meets the established definition of spoliation as willful destruction of evidence.
This conclusion is warranted both because Moore had a duty to preserve the evidence he
destroyed and because he acted with a culpable state of mind. The second section of the
argument focuses on why dismissal is the appropriate sanction for Moore’s egregious
misconduct. The two key considerations are the prejudice to Gilead resulting from Moore’s
misconduct and the inadequacy of a lesser sanction such as an adverse inference instruction to
the jury or the exclusion of a particular witness’ testimony. The third and final section of the
argument explains why granting monetary sanctions against Moore is appropriate in this case.
I. Moore Repeatedly Engaged in Willful Destruction of Evidence
Spoliation is the “destruction or significant alteration of evidence, or the failure to
preserve property for another’s use as evidence, in pending or future litigation.” Kearney v.
212, 216 (S.D.N.Y. 2003)) (emphasis added). The litigation does not need to be underway or
immediately pending. See Unigard Sec. Ins. Co. v. Lakewood Engineering & Mfg. Corp., 982
F.2d 363, 369 (9th Cir. 1992) (upholding the district court’s exclusion of testimony based on
evidence the plaintiff destroyed two years before filing suit). As long as litigation is
“reasonably foreseeable,” a party has a duty to preserve evidence. Micron Tech., Inc. v. Rambus
Inc., 2011 U.S. App. LEXIS 9730, at *26-32 (Fed.Cir. May 13, 2011).
The Federal Circuit, in Micron Technology, recently held that litigation was reasonably
foreseeable for the party that had destroyed and failed to preserve evidence for reasons that
included: (1) the party was on notice of the actions that would give rise to the litigation; (2) that
the party had taken steps in furtherance of the litigation; and (3) that because the party was the
plaintiff, whether litigation was commenced in fact depended upon that party’s decision to bring
suit. Id. Further, the court noted that “the important inquiry is not whether a particular
document made litigation reasonably foreseeable, but whether the totality of circumstances as of
the date of the document destruction made litigation reasonably foreseeable.” Id. at *33. The
facts of Moore’s case easily demonstrate that litigation was reasonably foreseeable; thus, Moore
had a duty to not permanently delete documents from his work laptop.
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Notably, Moore admitted that he was contemplating litigation as early as the spring of
2006. See Ex. B at 48-49. He consulted with attorneys to assist him with his qui tam action in
the spring of 2006. See Ex. A at 328. As in Micron Technology, by this time Moore was
planning to file suit against Gilead. Moore was also aware of any alleged actions by Gilead that
would give rise to litigation. Moreover, Moore had taken steps in furtherance of the litigation –
namely, secretly taping his colleagues and hiring attorneys for the purpose of litigation, see id.
at 111; Ex. B at 135, and intentionally increasing the number of speaker programs that he
considered to be “illegal.” Ex. B at 76-77. Simultaneously, while seeking to create this
evidence in support of his case, Moore engaged in a deliberate effort to destroy files of his own
choosing from his computer. Namely, Moore performed four “quick clean” wipes in 2006. See
Ex. C, CR1 at 18. He also performed two “deep clean” wipes, including one on November 8,
see id. at 2-3, just a week before he filed his qui tam complaint, see Pl.’s Third Am. Compl. ¶
14. Thus, the totality of the circumstances as of the fall of 2006 demonstrates that Moore
destroyed documents when litigation was reasonably foreseeable and, in fact, was being
initiated.
Likewise, Moore renewed his preoccupation with destroying evidence on an even
grander scale in the late summer of 2008. At that time, Moore’s qui tam action was well
underway. In addition, he had received a legal hold notice on December 7, 2006 instructing
him not to destroy any documents that could be related to the DOJ’s then pending
investigation of Gilead. See Ex. D.4 Nevertheless, Moore knowingly and deliberately wiped
all information from his laptop in August of 2008 before returning the laptop to Gilead. See Ex.
B at 108-09. Given that it was Moore’s qui tam complaint that launched the DOJ’s
4 He also received reminder notices on October 28, 2008 and October 31, 2008. See Ex. H, Legal Hold Memos.
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investigation of Gilead and that he had previously received a legal hold notice relating to that
very investigation, Moore surely knew that he had a duty to preserve information related to his
own qui tam complaint.
Moore has claimed that he “[did] nothing wrong,” and his wiping “is not a big issue”
because the e-mails erased were simply communications with his counsel. See id. at 112-13.
These claims wholly lack merit. The forensic analysis was able to uncover the names of some
files that were deleted in 2006, and those names appear to relate to issues of relevance to his
claims. For example, the deleted file names refer to the very physicians in Moore’s sales
territory – namely, Dr. Brutus and Dr. Exilhomme – for whom Moore claims he was
“pressured” to conduct the allegedly “illegal” speaker programs, see Ex. A at 74, 165. Although
the forensic analysis recovered the names of these files, the content of the files was permanently
deleted. See Ex. C, CR1 at 13-14.5 Moore admittedly destroyed documents relating to sales
data, personal files, action plans, e-mail communications regarding his search for employment,
and e-mails regarding assistance to government investigators, see Ex. B at 115, 121, which
would have been discoverable, or could have led to the discoverability of admissible evidence,
in the present litigation. Moreover, Moore has also admitted to engaging in instances of on-the-
job misconduct himself, see id. at 72-75, though he purportedly does not recall deleting any
documents that would evidence this, see id. at 120.
To the extent that Moore deleted communications with his attorneys, his deletions
nonetheless constitute spoliation. See Ex. E, No. 20. During Moore’s employment, Gilead
maintained a computer-usage policy that expressly informed employees that they had no right of
5 Other notable file names included: (1) “The HIV Drugs Mentioned in the tapes via eye witness accounts and supporting documentation.doc”; (2) “Clean My Computer”; (3) “Archive.pst”; (4) “E-mailarchive.pst”; (5) “Outdated mail 10-20-03.pst.” See Ex. C at GS_00007027, GS_00009177, GS_00007587, and GS_00009137.
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privacy with regard to information on their work computers. See Ex. G, Employee Handbook.6
Courts have held that employees who are told that their activities on company-provided
computers are subject to being monitored and should not be used for personal activities do not
have an expectation of privacy and, thus, cannot claim privilege for communications that were
conducted through those same computers. See, e.g., Holmes v. Petrovich Development Co.,
LLC, 119 Cal. Rptr. 3d 878, 898-99 (Ct. App. 2011); Scott v. Beth Israel Med. Ctr., Inc., 847
N.Y.S.2d 436, 441 (Sup. Ct. 2007). At bottom, Moore had an obligation to preserve this
evidence, which he blatantly disregarded. In any event, Moore’s destruction of files was so
extensive – including over 10,000 files in 2006 and a complete erasure of his hard drive in 2008
– that his spoliation could not possibly have been limited to communications with his attorneys,
nor does he claim this to be the case.
Accordingly, Moore should have known that the information he wiped from his hard
drive from 2006 to 2008 was potentially relevant to his lawsuit against Gilead; indeed, his
contemplation of litigation was the very reason that he destroyed this evidence.
B. Moore destroyed evidence with a culpable state of mind.
Given that Moore erased e-mails and other documents from his computer in 2006 and
wiped his hard drive of all documents and programs in 2008, it is clear that Moore engaged in
these activities in bad faith and with a culpable state of mind.
The Second Circuit has held that a “culpable state of mind” is satisfied by a showing that
the evidence was destroyed “knowingly, even if without intent to [breach the obligation to
preserve it].” Byrnie v. Town of Cromwell Bd. of Educ., 243 F.3d 93, 109 (2d Cir. 2001) (the
intentional destruction of relevant records, either paper or electronic, after the duty to preserve
6 Plaintiff acknowledged that he would abide by the rules, policies, and standards set forth by the Employee Handbook, which contained the Computer Usage Policies. See id.
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has attached, is willful). Moore’s deposition testimony confirmed without question that his
actions were done knowingly and in bad faith.
Moore has admitted to seeking out software specifically designed to erase his laptop
computer files and wipe his hard drive. See Ex. B at 113, 131. He acknowledged utilizing the
wiping software “frequently” in 2006 and 2008. See id. at 134, 152. He confirmed that these
were deliberate and intentional acts, see id. at 115, committed because he did not want Gilead to
have access to these documents, see id. at 111. More specifically, Moore testified that he
“deleted the information from the hard drive because [he] didn’t want Gilead who was out to do
[him] harm going through [his] personal e-mails. It was a . . . a matter of personal privacy.”
See id. He acknowledged that he understood how the SecureClean software worked and that the
program would permanently delete information. See id. at 134-36. Indeed, Moore volunteered
at deposition that he had more recently purchased the latest version of the wiping software –
presumably to continue fulfilling his erasure needs. See id. at 141. He even testified that he
does not feel he did anything wrong because he was attempting to keep information from his
“enemy,” Gilead, and that his behavior should not be a “big issue.” See id. at 113, 119. In
addition, Moore attempted to use the discovery process in this case to conceal the full extent of
his egregious behavior.
In Leon v. IDX Systems Corp., a factually similar case, the Ninth Circuit held that the
employee’s destruction of data on his employer-owned laptop amounted to willful spoliation of
evidence warranting dismissal as a sanction. 464 F.3d 951, 959 (9th Cir. 2006). Like Moore,
Leon destroyed evidence by deleting 2,200 files from his IDX-issued laptop computer during
the pendency of his litigation, which, among other things, alleged violations of the anti-
retaliation provisions of the False Claims Act and Washington state law. The district court
concluded that Leon’s behavior “amounted to willful spoliation because he knew he was under a
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duty to preserve all data on the laptop, but intentionally deleted many files and then wrote a
program to write over the deleted documents.” Id. Much like here, Leon admitted that he
intended to destroy information but contended that his intent was merely to protect his privacy.
See id. The district court rejected this argument, and the Ninth Circuit agreed. See id.
The Ninth Circuit noted that Leon used the wiping software well after IDX had filed a
declaratory judgment action seeking to establish whether the company could legally terminate
Leon. See id. The Court reasoned, therefore, that Leon was on notice that the files created on
his employer-issued computer were relevant to a lawsuit centering on the existence of legitimate
grounds for firing Leon. See id. Because Leon’s wiping of 2,200 files was indisputably
intentional, the Ninth Circuit held that the district court’s finding of willful spoliation and
dismissal was not clearly erroneous. See id. Moore, even more egregiously, intentionally
destroyed over 10,000 files; in addition, he carried out his most extensive wiping after he had
instituted qui tam litigation against Gilead and after he had received a litigation hold notice.
Moore’s conduct during discovery further corroborates the reality that he destroyed
evidence with a culpable state of mind. Moore provided a materially incomplete answer to
Gilead’s interrogatories when he omitted any reference to his wiping activities in late 2006 in
the weeks shortly before he filed his qui tam action. At deposition, he first denied any wiping
activities in 2006, but then – when directly challenged that he was not answering accurately – he
changed his story and definitively affirmed that he had “frequently” engaged in electronic
spoliation in 2006. This sort of tactical lack of candor violates the core principles of civil
discovery, which rely on adversaries to disclose potentially damaging facts when properly
questioned.
Accordingly, this Court should find that Moore’s acts amount to willful spoliation with
an undeniably culpable state of mind.
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II. Dismissal Is the Appropriate Sanction for Moore’s Egregious Spoliation
When a party has destroyed evidence relating to his own lawsuit, the Court may order
dismissal under its own inherent powers. See Chambers v. NASCO, Inc., 501 U.S. 32, 43
(1991); see also Leon v. IDX Sys. Corp., 464 F.3d 951, 958 (9th Cir. 2006) (quoting Anheuser-
Busch, Inc. v. Natural Beverage Distribs., 69 F.3d 337, 348 (9th Cir. 1995) (“Dismissal is an
available sanction when ‘a party has engaged deliberately in deceptive practices that undermine
the integrity of judicial proceedings’ because ‘courts have inherent power to dismiss an action
when a party has willfully deceived the court and engaged in conduct utterly inconsistent with
the orderly administration of justice.”)); Unigard Sec. Ins. Co. v. Lakewood Engineering & Mfg.
The Ninth Circuit has held that a district court should consider the following factors in
determining whether dismissal is appropriate: “(1) the public’s interest in expeditious resolution
of the litigation; (2) the court’s need to manage its dockets; (3) the risk of prejudice; (4) the
public policy favoring disposition of cases on their merits; and (5) the availability of less drastic
sanctions.” Leon v. IDX Sys. Corp., 464 F.3d at 958. While the Court must also consider “less
severe alternatives” than outright dismissal, this Court “need not make explicit findings
regarding each of these factors.” Id. A finding of “willfulness, fault, or bad faith” is required
for dismissal to be proper. Id.
7 Other courts have similarly found that dismissal is warranted when a party behaves egregiously in destroying evidence. See, e.g., West v. Goodyear Tire & Rubber Co., 167 F.3d 776, 779 (2d Cir. 1999) (“Dismissal is appropriate [as a sanction for spoliation] if there is a showing of willfulness, bad faith, or fault on the part of the sanctioned party.”); Miller v. Time- Warner Communs., Inc., 1999 U.S. Dist. LEXIS 14512, at *6-9 (S.D.N.Y. Sept. 22, 1999) (granting dismissal where plaintiff deliberately destroyed evidence and lied about it, noting that “[n]o lesser sanction would be adequate to penalize plaintiff for her misconduct and to deter others from engaging in similar conduct in the future”).
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It is self-evident that the first and second Leon factors – expeditious resolution and
docket management – weigh totally in favor of dismissal of Moore’s action. In addition,
although the fourth factor, the policy favoring disposition on the merits, normally weighs in
favor of Plaintiff, that assumption is questionable here where there has been so much relevant
evidence destroyed that the Court’s ability to resolve the litigation on the merits has been
significantly impaired. In this regard, one court has emphasized that:
Deliberate, willful and contumacious disregard of the judicial process and the rights of opposing parties justifies the most severe sanction …. The policy of resolving lawsuits on their merits must yield when a party has intentionally prevented the fair adjudication of the case. By deliberately destroying documents, the defendant has eliminated the plaintiffs’ right to have their case decided on the merits. Accordingly, the entry of a default is the only means of effectively sanctioning the defendant and remedying the wrong.
Byrnie v. Town of Cromwell Bd. of Educ., 243 F.3d 93, 107-12 (2d Cir. 2001)).
“[B]ecause ‘the relevance of . . . [destroyed] documents cannot be clearly ascertained
because the documents no longer exist,’ a party ‘can hardly assert any presumption of
irrelevance as to the destroyed documents.’” Leon v. IDX Sys. Corp., 464 F.3d 951, 959 (9th
Cir. 2006) (quoting Alexander v. Nat’l Farmers Org., 687 F.2d 1173, 1205 (8th Cir. 1982)). A
court, thus, may assume that destroyed evidence was relevant if it was destroyed through bad
faith or gross negligence. See Residential Funding Corp. v. DeGeorge Fin. Corp., 306 F.3d 99,
108-09 (2d Cir. 2002) (“[T]he intentional or grossly negligent destruction of evidence in bad
faith can support an inference that the destroyed evidence was harmful to the destroying party.”
(emphasis in original)).
Here, Moore concedes that he intentionally permanently deleted e-mails, documents, and
other correspondence so that Gilead would not have access to information that he kept on his
computer. See Ex. B at 111. For this reason alone, the Court should assume that the destroyed
evidence was relevant to Gilead’s defense.
Moreover, the forensic analysis also supports a finding that Moore deleted relevant
evidence. See generally Ex. C. However, there is no way for Gilead to ascertain whether
Moore engaged in other instances of illegal or improper conduct, or to recreate the content of
the deleted files, which may reveal further wrongful conduct. And, of course, due to the
complete erasure of the Toshiba hard drive in 2008, Gilead is unable to determine what other
relevant files might have existed.
“The prejudice inquiry ‘looks to whether the [spoiling party’s] actions impaired [the
non-spoiling party’s] ability to go to trial or threatened to interfere with the rightful decision of
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the case.’” Leon, 464 F.3d at 959 (quoting United States use of Wiltec Guam, Inc. v. Kahaluu
Constr. Co., 857 F.2d 600, 604 (9th Cir. 1988)). For example, in Leon, the Ninth Circuit held
that the types of files that Leon would have deleted out of privacy concerns would likely be at
the heart of the defendant’s defenses if the files were available. Id. at 960. Because any number
of the files Leon deleted could have been relevant to the defendant’s claims or defenses, the
Court upheld the district court’s finding that Leon’s spoliation “threatened to distort the
resolution of the case,” and therefore prejudiced the defendant. Id. (quoting Wiltec Guam, Inc.,
857 F.2d at 604).
Here, there is no doubt that Moore’s wiping threatens “to distort the resolution of this
case,” id. (quoting Wiltec Guam, Inc., 857 F.2d at 604), and prejudices Gilead. It is highly
likely, based on Moore’s own admissions and intentionally destructive acts, that the evidence
destroyed was relevant and helpful to Gilead’s defense. See Ex. B at 73-75, 115. When
questioned at deposition, Moore repeatedly confirmed that there is now no way to verify
whether the information he deleted was relevant to Gilead’s defenses relating to his job
performance, his violations of the Gilead Code of Conduct, the justifications for his medical
leave extension, his performance at the re-employment interview Gilead offered him in 2008, or
the extent of his efforts to find alternative employment with other pharmaceutical companies
when he was on medical leave from Gilead. See Ex. B at 162-65. Moreover, it is telling that
Moore has produced only nine e-mails in response to Gilead’s broadly framed requests for
production of documents. See Decl. of Celina Holmes-Murphy.8
8 The magnitude of Moore’s wiping activity is partly evident from Gilead’s having located approximately 13,800 e-mails where Moore was the sender or recipient in the e-mail archives of other Gilead employees that did not engage in wiping activities. In addition, although Moore was instructed, and was legally obligated, to retain all of his emails potentially relevant to litigation, Moore only archived 77 unique e-mail messages. See Decl. of Vicki Clewes.
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Moore may contend, in opposition, that Gilead has not been prejudiced because Gilead
has “backup” systems that preserved all the evidence Moore destroyed. Gilead, however, did
not back up the hard drives of field sales personnel such as Moore and therefore has no such
backup. Although Gilead conceivably backed up certain of Moore’s e-mail through its regular
backups of the Microsoft Exchange data stores, such backup systems generally are not a feasible
means of recovering specific documents because they are designed to cope with catastrophic or
disaster-recovery situations that damage or destroy a company’s entire computer system. See
Decl. of Vickie Clewes. In addition, although Gilead instituted the capability to archive certain
employee e-mails sent or received on company-issued laptops by field staff beginning in June
2007, that capability did not exist in 2006 when Moore was frequently wiping his computer in
anticipation of litigation. Id. As a consequence, Gilead does not have copies of, or reasonable
access to, Moore’s e-mails erased prior to June 2007, and has no potential access whatsoever to
his non-e-mail files that were wiped from his laptop’s hard drive.
In any event, because Moore has deprived Gilead of the opportunity to review the
totality of what was wiped and because Moore’s wiping of his hard drive on multiple occasions
is so egregious, the prejudice cannot be cured; and dismissal is justified. Cf. Harkabi v. Sandisk
Corp., 2010 U.S. Dist. LEXIS 87483, at *18 (S.D.N.Y. Aug. 23, 2010) (noting that dismissal is
justified in “only the most egregious cases, such as where a party has . . . intentionally destroyed
evidence by burning, shredding, or wiping out computer hard drives”) (internal citations
omitted) (emphasis added).
B. There Is No Less Drastic Sanction Available Here
As noted by the Court in Nursing Home Pension Fund v. Oracle Corp., 254 F.R.D. 559,
563 (N.D. Cal. 2008), courts have developed three types of sanctions for destruction of
evidence. First, a court can instruct the jury that evidence made unavailable by a party was
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unfavorable to that party. See Realnetworks, Inc. v. DVD Copy Control Ass’n, 264 F.R.D. 517,
523 (N.D. Cal. 2009) (citing Glover v. BIC Corp., 6 F.3d 1318, 1329 (9th Cir. 1993)); Akiona v.
United States, 938 F.2d 158, 161 (9th Cir. 1991)). Second, a court can exclude witness
testimony based on the spoliated evidence. See id. (citing Glover, 6 F.3d at 1329; Unigard Sec.
Ins. Co. v. Lakewood Engineering & Mfg. Corp., 982 F.2d 363, 368-69 (9th Cir. 1992)). And
third, the court can dismiss the claim of the party responsible for the spoliation. See id. (internal
citations omitted).
Here, the first two lesser sanctions are manifestly inadequate as a remedy for Moore’s
spoliation.9 As has been discussed above, Moore’s spoliation reflects a campaign of deliberate
destruction of evidence – which extended over two years – for the express purpose of blocking
Gilead’s access to information that might be useful for Gilead’s defense. See Ex. B at 115, 119,
168. As a consequence, Gilead would largely be “defenseless” in response to any material that
Moore might use to overcome the presumption. See Leon v. IDX Sys. Corp., 464 F.3d 951, 960
(9th Cir. 2006). Moreover, the exceptionally wide swath of Moore’s spoliation activities tends
to render the adverse inference unmanageably broad and diffuse because Moore’s extensive
wiping has foreclosed the ability to associate an adverse inference with any specific category of
documents.
Also, the scale of Moore’s spoliation activities is clearly in line with precedents that
have found dismissal to be the appropriate sanction. See, e.g., id. at 956 (dismissal was proper
9 Additional considerations in determining whether dismissal is appropriate are “whether the district court implemented alternative sanctions before ordering dismissal” and “whether the district court warned the [spoliating] party of the possibility of dismissal before ordering dismissal.” See Leon v. IDX Sys. Corp., 464 F.3d 951, 960 (9th Cir. 2006). However, as was the case in Leon, these options are not applicable here because the plaintiff “erased the files and ran the wiping program before the district court had an opportunity to compel discovery or otherwise order lesser sanctions.” Id.
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where plaintiff deliberately, and without remorse, deleted and wiped files that might have been
relevant to plaintiff’s claims); Miller v. Time-Warner Communs., Inc., 1999 U.S. Dist. LEXIS
14512, at *6-9 (S.D.N.Y. Sept. 22, 1999) (dismissal was proper where plaintiff deliberately
destroyed evidence and repeatedly committed perjury regarding same). As has been noted,
Gilead’s forensic report indicates that Moore wiped more than 10,000 files in 2006, see Ex. C,
CR1 at 14; and Moore himself openly acknowledges that he wiped his entire hard drive in 2008,
see Ex. B at 111, 114, so that no party can assess the volume of files destroyed by Moore at the
very time he contends that Gilead was subjecting him to retaliation.
It is also notable how often at deposition Moore conceded that his allegations against
Gilead were not supported by any documentation or by any corroborating witness. See, e.g., id.
at 53-54, 120. In other words, Moore’s spoliation strategy is a calculated gamble on his part to
deprive Gilead of corroborating documentation for summary judgment and potential defenses at
trial based on damaging admissions. An adverse inference instruction would effectively reward
Moore’s tactic, at least in part, by weakening the prospects for summary judgment in favor of
Gilead and by requiring Gilead to have to endure the substantial burden and expense of further
discovery and a jury trial.
The exclusion of witness testimony is similarly not feasible in this case because of the
exceptional thoroughness and extensiveness of Moore’s wiping activities over a two-year
period. This lesser sanction would be extremely difficult to tailor to the circumstances of this
case where the Plaintiff has worked so assiduously to create such a large evidentiary void.
Lastly, the adverse inference alternative is not an adequate sanction because it allows
Moore to continue imposing substantial costs on Gilead that will necessarily have to be incurred
prior to trial. Those costs include, for example, expenses for expert-witness discovery; the
substantial costs of preparing and arguing a summary judgment motion; and, of course, time-
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consuming diversions of Gilead staff from their regular duties and the expenses associated with
preparing witnesses for trial.
III. Monetary Sanctions Are Warranted Because Moore Has Wrongfully Destroyed Evidence
This Court should also award Gilead the reasonable costs and attorneys’ fees associated
with bringing this motion and conducting a forensic analysis to discover Moore’s destruction of
evidence. “Monetary sanctions may be imposed where one party has wrongfully destroyed
evidence.” In re Napster, Inc. Copyright Litig., 462 F. Supp. 2d 1060, 1078 (N.D. Cal. 2006)
Before a Court may award sanctions in the form of attorneys’ fees and costs under its “inherent
powers,” “the court must make an express finding of that the sanctioned party’s behavior
‘constituted or was tantamount to bad faith.’” See Leon v. IDX Sys. Corp., 464 F.3d 951, 961
(9th Cir. 2006). In In re Napster, 462 F. Supp. 2d at 1078, the court held that the plaintiff was
entitled to an award of attorneys’ fees given the degree of the defendant’s culpability. Similarly,
in Leon, 464 F.3d at 961, the Ninth Circuit upheld a $65,000 monetary spoliation sanction
against the plaintiff.
Moore admitted to willfully destroying relevant evidence on numerous occasions – most
notably, after litigation had ensued – in order to ensure that Gilead (his “enemy”) did not have
access to the information. Based on Moore’s expressly acknowledged bad faith, this Court
should likewise award Gilead monetary sanctions.
CONCLUSION
Gilead respectfully requests that the Court enter an Order dismissing with prejudice
Moore’s Complaint as a sanction for his intentionally destroying evidence while litigation was
being contemplated and while litigation was ongoing. Gilead also requests an award of its
reasonable expenses and attorneys’ fees incurred in bringing this Motion and investigating
Moore’s wiping activities, and such other relief that the Court finds just and proper.
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DATED: August 1, 2011
By: /S/ Richard A. Jones RICHARD A. JONES (BAR NO. 135248)
COVINGTON & BURLING LLP 1 FRONT STREET SAN FRANCISCO, CA 94111 (415) 591-6000 [email protected] THOMAS S. WILLIAMSON, JR. (PRO HAC
VICE) SHIMICA D. GASKINS (PRO HAC VICE) COVINGTON & BURLING LLP 1201 PENNSYLVANIA AVE., N.W. WASHINGTON, DC 20004 (202) 662-6000 [email protected][email protected] Attorneys for Defendant Gilead Sciences, Inc.
Case3:07-cv-03850-SI Document78 Filed08/01/11 Page29 of 29
